Failure to screen tenants can cause legal trouble, loss for landlords
The president of your #WiseChoice for background screening solutions and I team up to warn landlords about the risks of not professionally screening their tenants. I know. I just experienced them.
You see, a Memphis-area property management company recently applied for consideration as a #WiseChoice. I’m not naming the company, but I was initially intrigued: property management is one of the consumer service categories we’re looking to fill with an exclusive, honorable #WiseChoice.
The company’s principal applied for consideration through our “Become A Wise Choice” portal. I designed that portal not only to disclose my standards for consideration, but also to see how well applicants follow my instructions.
That’s where the problems started with this particular property manager.
His application consisted of one sentence: a request that I call him, along with his phone number. No details, no background history, none of the information I explicitly request on my portal page. I responded by email, requesting that information. He replied back, requesting my price structure…still no details. I replied once more, asking if he had reviewed my standards for consideration. Another curt reply: “Yeah, we meet those standards.”
No, they don’t. I checked. That’s what I do.
Sure, the property management company had an impressive Better Business Bureau rating, but I’m not sure how. The bureau had documented ten complaints against the company in the last three years. By bureau standards, that’s a disturbing trend. Remember, those are just the complainants who had the foresight to file a BBB complaint.
Then I discovered the company had a 1-star customer rating with the bureau. I found out why: one of its property owners filed a complaint. In the complaint, the owner explained in detail how the property tenant filed for bankruptcy shortly after signing the lease, faced eviction — then proceeded to trash the place. The landlord did nothing to screen the tenant’s background or to protect its investor’s property.
Not a #WiseChoice.
“A proper tenant screening can prevent future problems by knowing your tenant has a stable financial background, along with a clean or minimal criminal background,” said Kevin Helms, president and CEO of ActiveTracks, LLC, your #WiseChoice for background screening solutions. Helms and the Federal Trade Commission (FTC) said a proper screening would include a dossier of what are referred to as consumer reports: rental histories, past evictions, credit reports from each of the three bureaus and criminal records.
But if property managers don’t employ a professional tenant screening service, Helms said they could risk violating a tenant’s privacy, civil rights and federal law, specifically the Fair Credit Reporting Act (FCRA). “Landlords and property management companies still have to follow all FCRA rules and any additional state laws regarding tenant screenings,” Helms said.
A professional background-screener like ActiveTracks LLC and its proprietary ActiveTracking 24/7 real-time tracking of tenants’ civil, criminal and bankruptcy histories can ensure compliance with the FCRA and with state law. It could also make sure a property management company meets all procedures and protocols for consumer reporting and prepare it for handling adverse actions, as explained in the FTC’s guidance for landlords on using tenants’ consumer reports.
“It is imperative that the property management company uses a professional screening process to help protect all parties involved,” said Helms.
This particular property manager didn’t — and it cost him and his company my endorsement.
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